Taking it to the Next Level: Innovation in Sourcing and Procurement

By Patricia Van Arnum - DCAT Editorial Director

March 14, 2018

What does it take to drive innovation to improve business outcomes? Partnership strategies are key, according to a recent PwC study, a subject that will be explored at DCAT Week '18.

The DCAT education program, Innovation in Sourcing and Procurement, offers best practices and lessons learned in how to drive value and performance in the pharmaceutical customer–supplier relationship.

Inside the innovation ecosystem

A 2017 PwC report that surveyed more than 1,200 global executives and business leaders examined how top companies are meeting innovation challenges. Among the findings, the report notes that less than one quarter of respondents say that they lead their competitors in innovation. The most innovative companies are promoting innovation by breaking down traditional barriers to bring in a much wider ecosystem for ideas, insights, talent, and technology.

The PwC report shows that companies applying customer-engagement strategies that employ design thinking and user-driven requirements from ideation to product/service launch are about twice as likely as their survey peers to expect growth of 15% or more over the next five years. The report further shows that when it comes to these more-inclusive operating models, more than one-third of companies say that customers are their most important innovation partners, and a majority reports that customer-engagement strategy helps define innovation requirements from the early-ideation phase. Real-time customer engagement, in particular, is playing an increasingly useful role in innovation.

When asked who are the most important external and internal partners for innovation, most companies surveyed (60%) consider internal employees as their most important partner for innovation. Thirty-two percent of the businesses surveyed say that finding employees with the right skills is their biggest people-related innovation challenge. This challenge was topped only by the need to establish a leadership culture conducive to innovation, cited by 37% of companies, according to the study. In identifying the human factors that determine innovation success, 65% of respondents said innovative behaviors and culture, followed by “fresh thinking" (63%), strong C-suite leadership (52%), clear business models (42%), and increases to the innovation budget (32%).

Given this framework, what are the implications for sourcing, procurement, and supply management teams and their external partners? The DCAT Week education program, Innovation in Sourcing and Procurement, which will be held Wednesday, March 21, examines innovative approaches in the customer–supplier relationship both within and outside the pharmaceutical industry.

Advanced sourcing in new product development

At the DCAT Week program, Jeroen Dubois, Director, Advanced Sourcing and Innovation, Small Molecules, Janssen Supply Chain Procurement, Johnson & Johnson, will provide his company’s experience of using an advanced sourcing and innovation team to achieve benefits in terms of risk mitigation and value creation by optimizing technology scouting and engaging with the right suppliers at the right point of time in drug development. He will share his company’s experience in applying a phase-dependent development approach aligned with commercial category strategies and explain the role that Procurement plays to bring about innovation.

Migrating a molecule from in-house to external production

Moving manufacturing from in-house production to a contract manufacturing organization (CMO) is a common decision taken by pharmaceutical companies, but what can be done to ensure the success of the project? Melanie Miller, PhD, Head of R&D External Manufacturing, Product Development, Global Product Development & Supply, Bristol-Myers Squibb, will outline key success factors for managing an external manufacturing network and innovative ways for project management, including in organization design and analytics, to drive value.

Innovation in supplier relationship management: Out-of-industry views

How can pharmaceutical companies learn from other industries to optimize the customer–supplier relationship? Saurabh Goyal, Associate Partner, McKinsey & Company, takes an out-of-industry view to provide innovative approaches in supplier relationship management, including collaboration strategies between customer and supplier and new ways to manage the relationship, such as collaborative supply-chain planning. He will provide best practices and case studies from outside the industry and explain how they can be applied to pharmaceutical companies and suppliers.

Additional information on the DCAT Week program, Innovation in Sourcing and Procurementincluding how to register, may be found here.

Note: Online program and event registration closes on Wednesday, March 14th at 5:00 PM (ET). Onsite registration available thereafter.

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Jeroen Dubois
Director, Advanced Sourcing
and Innovation
Janssen Supply Chain
Johnson & Johnson

Melanie Miller, PhD
Head of R&D External 
Manufacturing, Product 
Development and Global Product
Development & Supply
Bristol-Myers Squibb

Saurabh Goyal
Associate Partner 
McKinsey & Company